Market Morning

A very positive night on equity markets, as US manufacturing data and Facebook IPO speculation excited markets, alongside positive manufacturing gauges from the UK and Germany.

In detail:

The UK FTSE finished up very strongly, nearly 2% up at 5790 points, well above its resistance level at 5700 points with the German DAX doing even better, up 2.4% or 157 points to 6616.

The Euro (EUR/USD) climbed above 1.31 against the USD during the night currently trading at 1.3126, as the USD Index slipped to be just above 79, still below support at the 79.6/80 point zone. Most other currency pairs against the USD rose as well, except the Yen which was flat.

US markets all finished in the green, snapping back from stagnation but low volume still dominating. The broader S&P500 Index finished up 11 points or 0.9% to 1312 points, whilst the narrower Dow Jones was up 83 points or 0.6% to 12716 points. Finally, the tech heavy NASDAQ Composite was up 34 points or well over 1%, possibly on speculation of Facebook’s imminent IPO.

The ever resilient AUD jumped above 1.07 against the USD overnight, currently trading at 1.0711, whilst Aussie 10 year bonds came off a bit, yields rising to 3.73% still below the cash rate.

To commodities, WTI crude bucked the risk-on trend, and slipped 0.9% to $97.61USD, still well below the psychologically important $100USD a barrel level. Let’s hope for US consumers that it stays below this level.

Gold continues to maintain strength, gaining $9USD an ounce overnight to $1749USD, hitting $1754USD at one stage, now waiting for the open of the Asian session.

Silver jumped almost 2% to be at $33.76USD per ounce on the spot markets. Metal commodities rebounded across the board on the London metals market (LME), with aluminium up 1.4%, copper over 1.5% and nickel up just under 1%, only tin letting the side down.

The Aussie SPI Futures are pointing to a very strong open for the S&P/ASX200 index, probably up more than 1%, around the 4280 points level, on these great leads. Locally, the trade balance data will be closely scrutinized alongside very important building approvals, whilst the New Zealanders await through unemployment rate figures which will be interesting for our banks (which are their banks….some analysts forget this!)

Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.

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  1. The stronger Aussie and Euro does nothing for Australia and Europe, while the weaker USD turbo-charges the US recovery.

    While this keeps up, go long USA.

    • Lorax if the AUD got back to the 70-80 range it might not be as bad. The problem is China and the US are in a currency war and Europe has joined them. Until that is over the AUD will be high or higher until the Aussie govt does something about it or the housing goes to hell, jobless rate goes through the roof and the banks drop rates like everywhere else. I think all this is about to happen.

      “While this keeps up, go long USA”
      Spot on with this comment.

    • Yeah I noticed that on my drive back from Brisbane last night. I rarely fill up – they dont let me out of the farm here much – (and dont look at the bowser price when i do), but noticed a lot of 1.50 per litre signs…is this higher than normal?

  2. Good performance last night, I don’t imagine it will be long before someone accuses yourselves or the ABC of talking the economy down if you keep getting this level of exposure.

  3. “I mean, they face a balance sheet risk, they face earnings risk, they face prudential risk, and not only that, but political risks from both sides of politics. So, that’s beside the funding problems they might have from a European crisis or a soft landing in China. There’s much better businesses out there to invest in.”
    Princely one:
    care to elaborate on these better businesses?

    • Health care, IT sectors have some gems, also engineering/mining services. Small Ords mainly, but also some ASX100 picks.

      In a secular bear market its all about resilience (earnings robustness, solid dividends) and finding growth gems whilst managing macro risk.

      • Hey Prince you might want to do an analysis on the Sharia Index which was launched yesterday, noticed that it tends to have companies that either make or dig things up, no Pork, no alchol, no gambling or banks. actually the whole sharia finance is pretty interesting

      • I’ll ask one of my clones to have a look…

        in all seriousness, Islamic finance is fascinating. Its almost all based on trust and your words, and is against usury and the general concept of debt, AFAIK.

        Unlike Western finance…

  4. Hi, I want to buy and sell silver and gold US mining shares, can anyone suggest the best broker to use from Australia, many thanks